The Supreme Court has recently confirmed that a debtor can be adjudicated a bankrupt in Ireland and be subject to the Irish bankruptcy regime notwithstanding that the debtor has already been adjudicated a bankrupt in another jurisdiction, in this case the US.
Background
Mr Dunne had been adjudicated a bankrupt by the High Court on 29 July 2013. In March of that year Mr Dunne had filed for bankruptcy in the US. He attempted to overturn the bankruptcy adjudication in Ireland in the High Court. However, he was unsuccessful in that application and ultimately appealed to the Supreme Court.
The principal ground of appeal related to a challenge on the jurisdiction of the High Court to make bankruptcy adjudication in Ireland in circumstances where he had already been adjudicated a bankrupt in the US. He argued that this amounted to ‘dual bankruptcy’ which was contrary to the jurisprudence in international insolvency and that the Irish legislation did not permit it.
The Supreme Court was unanimous in its decision and found against Mr Dunne’s appeal. The Court noted that there was no Irish case law on dual bankruptcy but, having regard to the UK authorities on the issue, was satisfied that there was nothing in the Irish personal insolvency legislation which precluded the High Court from making an order adjudicating Mr Dunne a bankrupt. The Court also noted that it was not the role of the Supreme Court to make any determination regarding the conduct of the bankruptcy although it did acknowledge that dual bankruptcies could, in practice, give rise to some procedural issues in the administration of the insolvent estate.
Conclusion
This decision of the Supreme Court is significant in that it has confirmed that it is possible for a debtor to be adjudicated a bankrupt in this jurisdiction despite having previously been adjudicated a bankrupt in another jurisdiction. This may have some consequence for debtors seeking to avail of the perceived more lenient bankruptcy regimes in other jurisdictions such as the US. However it should be noted that this decision is limited to jurisdictions that are not subject to the European Insolvency Regulation which governs multi-jurisdictional insolvencies amongst participating States and will not apply, for example, to Irish debtors that have been adjudicated bankrupt in the UK.
Contributed by Craig Sowman.
